2016 in Review: Supply Chain ManagementARTICLE

By Christine Parizo

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Both the digitization of business as well as growing economic and political uncertainty reverberated throughout the supply chain in 2016. New supply chain management concerns arose – and new technologies emerged to help mitigate those concerns, expand supply chain management capabilities, and drive ROI.

All companies looking to make a profit carefully weigh each market’s inherent opportunities against its potential costs. But for small and mid-sized enterprises (SMEs), the World Trade Organization (WTO) says there is an additional calculation: the hurdles they face are often higher than those confronted by large multinational corporations.2

Omni-Channel Sales Mandatory for Retail Supply Chain Management

For retailers, omni-channel sales became mandatory rather than optional.3 That drove requirements for retail supply chain management systems to support online orders and delivery, as well as the ability to fulfil online orders at brick-and-mortar locations. Many supply-chain management systems, including transportation management solutions, have become cloud-based, lowering the cost of entry and total cost of ownership.

Blockchain was still in its infancy in 2016, but many banks and other companies began experimenting with the technology. In the supply chain, blockchain has the potential to cut out middlemen and increase transparency, providing an authoritative record of the parties involved in a transaction as well as the price, date, location, quality and state of the goods.4 It may also allow companies to trace products’ content back to the origin of the raw materials used.5 In 2016, Wal-Mart began using blockchain in a trial to track food items, while IBM offered a platform designed to let companies test blockchain technology for tracking high-value goods.6

IoT devices such as GPS trackers and other sensors create opportunities to transform supply chain management and third-party logistics by tracking assets in real time, whether they are in the warehouse or in transit. According to a joint GT Nexus/Capgemini study of executives at large manufacturing and retail organizations, 70 percent said they have already launched a digital supply chain transformation effort; and 94 percent said that in five years, they expect to receive more real-time status updates from across the entire supply chain.7

As self-driving vehicles grabbed headlines in 2016, Uber Technologies’ Otto delivered the world’s first shipment by a self-driving truck, transporting more than 50,000 cans of Budweiser beer 120 miles to its destination.8 While we may be a long way from seeing highways full of self-driving trucks – not to mention captain-less ships and pilot-less planes – companies are expected to continue further enhancing self-driving technologies in 2017. Legislative and regulatory hurdles remain, of course; however, driverless trucks have the potential to change supply chain management significantly as the technology is refined.

The Takeaway

Technology propelled many supply chain management innovations in 2016, and may be equally important in 2017. Improved payment solutions, IoT and blockchain are among the technologies helping to accelerate interactions among suppliers, mitigate risk and increase transparency. Driverless vehicles may present a whole range of new possibilities for automating the supply chain.

The Author

Christine Parizo

Christine Parizo is a professional writer specializing in business and technology. She's written for a variety of TechTarget sites, including searchSAP.com , searchSOA.com , and searchCloudApplications.com, as well as HPE's Infrastructure Insights and The Pulse of IT.

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